CLS - Celestica Is Still An Attractive AI Buy Despite The Recent Run-Up
2024-03-25 14:55:06 ET
Summary
- CLS is another beneficiary of the ongoing generative AI boom, with the increased demand for ML/ AI-related products triggering its accelerated top/ bottom line growth through FY2026.
- The management has also put much of its increased cash flow to great use, attributed to the consistent share repurchases and expanded shareholder equity.
- On the other hand, due to CLS' inherently lower-margin manufacturing business model, readers must also temper their near-term expectations, especially given the ramp-up in Thailand/ Malaysia operations.
- The stock is likely to trade sideways over the next few quarters as it grows into its premium valuations, before things accelerate in 2025.
The CLS Investment Thesis Remains Robust Despite The Recent Run-Up
Celestica Inc. ( CLS:CA ) is another beneficiary of the ongoing generative AI boom, since the company is a manufacturer of enterprise-level data communications and information processing infrastructure products, including routers, switches, data center interconnects, edge solutions, and servers/ storage-related products....
Celestica Is Still An Attractive AI Buy Despite The Recent Run-Up